Income of the farmers and farmer producer organizations in India

The agriculture is the “backbone” of the Indian economy. The agricultural sector has been facing the problems of small and marginal land holdings. The small and marginal farmers make up the majority of cultivators. Nearly 85 percent of operational land holdings are less than two hectares of land. The increasing number of suicides of small and marginal farmers indicates financial distress and indebtedness of the farmers. The farmers are more vulnerable to risks. Further the income of the farmers has been declining and uncertainty. The farmers are in unorganized form in India. They must be encouraged to take the advantages of the economies of the scale. The Honorable Finance Minister has introduced a new Scheme “Formation and Promotion of Farmer Producer Organizations in 2019–20 budget with target of 10,000 new FPOs in the country by the end of 2023–2024. The FPOs will be formed by Cluster-Based Business Organizations (CBBOs) with professional support for a period of five years for economic viability. It follows the model of One District, One Product with a matching Equity Grant of Rs. 2000/- per farmer. The loan of Rs.2.00 Crores per FPO will be made available. Each FPOs will require a minimum of 300 members. Hence this paper is an attempt to explain the ways and means to increase the income of the small and marginal farmers through FPOs.